Sofema Aviation Services (SAS) www.sassofia.com considers key aspects of the Aircraft Lease Return Process.
Introduction
Anyone who has witnessed several lease returns will, without doubt, testify that not all run smoothly and some may even become a significant financial burden for the lessee.
Whilst the lessee wants to minimize expense, the lessor’s goal is typically to be able to re-market the aircraft with two clear years of operation without significant maintenance requirements. (not necessarily compatible outcomes!)
A consistent factor experienced by many lessees is a lack of appreciation of the time needed to complete all the due diligence to prepare the various requirements associated with the redelivery process – The keywords here are ownership & discipline.
Meeting the redelivery or return condition is a legal obligation and any delay will probably incur additional lease payments until such time as the aircraft “does” meet the required conditions.
Preparing for redelivery takes considerable time in terms of the work required and can be manpower-constrained and expensive. (although a lot less expensive when compared with a problematical return)
The Key to a successful aircraft lease return is – Preparation!
Understanding Re-Delivery Conditions
Operating lease agreements will typically specify both the maintenance status as well as the expected general condition in which the aircraft must be returned to the Lessor.
Whilst in the perfect world the redelivery conditions should be negotiated before the lease commences, it is often fully understood at the end of the process when even it is late to take any mitigating steps.
Focus on Planning from the earliest possible opportunity
- Ensure the most detailed record review with sufficient manpower
- Ensure all return conditions can be complied with
- Detailed awareness of Engine Health & Borescope Status
Note
The terminology and wording used can impact the interpretation of the redelivery conditions:
- Lack of Clarity & Precise Wording.
- Ambiguity during the drafting of the agreement.
- Use of terms such as ‘fair wear and tear’ are very subjective (consider use wording with more clarity such as ‘the cabin shall be free from scratches, tears, nicks, and stains.”
How Soon to Start the Process (Internally)
While it is not uncommon for the process to start between 15 months out and 9 months (or less) Some Experts recommend 24 months prior to redelivery being a good time to start the process particularly so when taking into consideration a number of major maintenance events for example:
- C Check,
- Structural Inspection Tasks,
- Engines,
- APUs, and
- Landing Gear.
Next Steps
Check out the Forthcoming Training Session at this link
Dates & Place: 6 December to 10 December 2021 WYNNS HOTEL Dublin
Included Courses:
Managing Aircraft Lease Agreements and Maintenance Reserves – 3 Days, Dublin, Ireland
Technical Records for Aircraft Lease Management – 2 Days – Dublin, Ireland
Email team@sassofia.com to ask for Early Bird and Multi Delegate Discount
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Aircraft Lease agreements, Aircraft Lease Redelivery, Aircraft Lease Returns, Aircraft Leasing, Aircraft Redelivery, Aircraft Technical Records, aviation, Aviation Training, Dublin training session, EASA regulations, Lease Return, SAS blogs, SAS training
